UBS: Inventec (2356.TW) 2026 AIC Live Takeaways – Upbeat AI and Traditional Server Outlook
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UBS initiated coverage on Inventec (2356.TW) with a Neutral rating and a 12-month target price of NT$50.00, compared to the current share price of NT$63.90. The note highlights that Inventec is successfully pivoting toward AI servers, which now constitute half of a server division that accounted for 49% of total first-quarter 2026 revenue.
Robust demand from hyperscale clients is propelling server unit growth of approximately 20% and server revenue growth exceeding 30% year-over-year. This strength effectively offsets an expected high-single-digit decline in notebook shipments. Management noted that April revenue of NT$84.8 billion already met 35% of second-quarter expectations. Consequently, UBS projects a 20% sequential revenue increase for the second quarter, outpacing the market consensus of 12%. Operating margins remain stable at 1.8–2%, supported by a favorable product mix shift, higher average selling prices, and working capital monetization.
However, significant AI infrastructure bottlenecks persist. Memory shortages represent a critical constraint for the second half, while testing cycles for AI servers stretch to 8–10 weeks compared to just one week for standard servers. This dynamic has inflated inventory levels from NT$76 billion to NT$110 billion. Furthermore, power availability is emerging as a crucial challenge for high-density testing. Given these solid fundamentals balanced against a premium valuation of roughly 20 times earnings, UBS maintains its Neutral stance.
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